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Waste Management's latest Republic bid is too good to pass up |
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| Aug 11, 2008 09:43 AM UTC |
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Tracked Blogger
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Via BloggingStocks:
Filed under: Deals, From the boards, Products and services  Waste Management Inc. (NYSE: WMI) raised its hostile bid for smaller rival Republic Services Inc. (NYSE: RSG) by more than 8% to $6.73 billion, a premium that should be enough to scuttle Republic's $6.24 billion purchase of Allied Waste Industries Inc. (NYSE: AW).Under the terms of the deal, Waste Management would buy Republic for $37 per share, a premium of almost 33% to Republic's closing price on July 11, the last trading day before the company's buyout proposal was disclosed. The proposal is above Republic's all-time high stock price. Moreover, Waste Management will pay Republic, which rejected Waste Management's earlier offer as inadequate, a fee of $250 million if the merger does not close because of opposition from the U.S. Department of Justice. "Our $37.00 all-cash proposal clearly offers Republic stockholders a better and more certain value alternative than is contemplated in the Republic-Allied transaction," said David P. Steiner, Waste Management's CEO, in a press release. "We believe our proposal is clearly superior for Republic's stockholders and is designed so we can work cooperatively with Republic to structure a transaction that would benefit both Republic and Waste Management stockholders." A combined Waste and Republic would create annual synergies of $200 million, $50 million more than the savings created by the Republic-Allied deal, according to the Wall Street Journal. The reason for Waste Management's interest in Republic is simple according to the paper: "Though smaller than Waste or Allied, Republic is generally regarded as the best-run trash hauler in the country, and its stock has outperformed its rivals."Read | Permalink | Email this | Comments <map name="google_ad_map_145-1280930"><area href="http://imageads.googleadservices.com/pagead/imgclick/145-1280930?pos=0" shape="rect" coords="1,2,367,28" /><area href="http://services.google.com/feedback/abg" shape="rect" coords="384,10,453,23" /></map> 
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